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Tuesday, March 21, 2023

German business leaders warn against withdrawing from China

BERLIN (AP) — A group of top German business executives is warning against China’s withdrawal, while acknowledging that it is right for Germany to redefine its relationship with Beijing.

The eight chief executives’ intervention in an article Thursday for the Frankfurter Allgemeine Zeitung newspaper comes as Germany grapples with its future trade and political relationship with China. The authors included the CEOs of the industrial conglomerate Siemens, the chemical manufacturer BASF, the technology company Bosch, the auto parts supplier Schaeffler and the port of Hamburg.

They said that the sites of German companies in China and in other parts of the world contribute significantly to their competitiveness, and that China has become the second largest and most dynamic market in the world, “so our presence there is particularly important in interest of the German economic strength. ”

The potential of the Chinese market offers the opportunity to scale faster and be more successful in other markets, securing jobs in Germany, the authors argued.

They said that, given China’s increasingly assertive behavior and the human rights situation in Xinjiang province, “it is right that Germany today defines its relationship with China in a more nuanced way, in the three dimensions of competition, cooperation and systemic rivalry. But, they added, “in the current public discussion, we perceive an almost exclusive emphasis on systemic rivalry, in words and concrete measures.”

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“Despite all the challenges from and with China, we are convinced that its fundamental growth dynamics will continue,” the authors wrote. “A Chinese withdrawal would deprive us of these opportunities.”

In recent weeks, Chinese investments in Germany have come under fire as officials seek to balance strong trade relations with a desire to avoid repeating mistakes made with Russia, which once supplied more than half of the country’s gas. native of Germany and now does not supply anything.

Last month, Chancellor Olaf Scholz’s coalition government discussed whether to allow Chinese shipping company COSCO to take a 35% stake in a container terminal in the port of Hamburg. The Cabinet finally authorized COSCO to take a stake below 25%, ensuring that it would not gain the ability to block the company’s decisions.

On Wednesday, the cabinet blocked the sale of a chip factory in Germany to a Swedish subsidiary of a Chinese company and a second planned investment, which the government did not detail.

In between, Scholz visited Beijing last week.

Scholz encourages companies to diversify but does not discourage doing business with China. He said before his trip that “we don’t want to cut ourselves off from China,” but “we will reduce unilateral dependencies in the spirit of smart diversification.”

In Thursday’s article, the chief executives agreed that “we need to diversify risks,” for example into chips, batteries and raw materials.

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